Talwalkars Better Value Fitness (Q1 FY14)

India Infoline News Service | Mumbai |

Talwalkars Better Value Fitness (TBVF) reported ~31% yoy in net revenues driven by increase in consolidated gym base to 145 from 127 a year ago

CMP Rs128, Target Rs190, Upside 49.0%
 
  • Talwalkars Better Value Fitness (TBVF) reported ~31% yoy in net revenues driven by increase in consolidated gym base to 145 from 127 a year ago
  • Amongst the newly launched initiatives, Zumba program now covers 31 centres with targeted expansion to 100 in FY14; Reduce outlets have also been expanded to 44 centres with estimated 75 centres by end FY14; company signed a master franchisee agreement in May 2013 for establishing 30 HiFi gyms in Tier III & IV towns over next three years
  • OPM improved 96bps yoy due to 224bps yoy decline in staff cost though admin & other expenses rose yoy due to one time expense towards launch of Reduce program; reported PAT growth trailed EBIDTA rise on higher yoy depreciation 
  • Q1 and Q3 being typically lean quarters are not true indicators of full year performance; we expect the full impact of new initiatives to be felt over next few quarters. Company expects share of value added services to improve from 18-22% of sales to about 35-40% in the next three years. Marginally tweak our FY14/15 estimates but retain BUY with revised target Rs190 (earlier Rs210).   
Results table (consolidated)
(Rs m) Q1 FY14 Q1 FY13 % yoy
Gross sales 374 285 31.1
Less: service tax (39) (30) 31.0
Service tax (%) 10.5 10.5 -
Net sales 335 255 31.2
Other op income 2 2 (2.0)
Revenues 337 257 30.9
Staff (77) (65) 19.2
Admin & other expenses (133) (98) 35.3
Operating profit 126 94 34.3
OPM (%) 37.5 36.5 96 bps
Depreciation (50) (33) 53.8
Interest (30) (25) 17.8
PBT 46 36 28.2
Tax (6) (5) 27.5
Effective tax rate (%) 14.0 14.1 (7) bps
Minority int (5) (3) 107.6
Reported PAT 34 28 21.0
Source: Company, India Infoline Research
 
Financial summary
Y/e 31 Mar (Rs m) FY12 FY13 FY14E FY15E
Revenues 1,194 1,509 1,864 2,240
yoy growth (%) 28.6 26.4 23.6 20.1
Operating profit 543 726 899 1,080
OPM (%) 45.5 48.1 48.2 48.2
Reported PAT 221 300 355 462
yoy growth (%) 37.5 36.2 18.0 30.2





EPS (Rs) 9.1 12.5 14.7 19.1
P/E (x) 13.9 10.2 8.7 6.7
P/BV (x) 2.1 1.6 1.4 1.2
EV/EBITDA (x) 8.2 6.4 5.6 4.5
Debt/Equity (x) 1.1 0.8 0.8 0.6
RoE (%) 16.3 17.0 15.8 17.7
RoCE (%) 15.2 16.7 17.4 19.2
Source: Company, India Infoline Research
BSE 304.00 3.60 (1.20%)
NSE 303.40 2.60 (0.86%)

***Note: This is a NSE Chart

 

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